Unusual circumstances, geographies and risk concentrations contributed to higher-than-normal natural catastrophe losses, notes German reinsurer
From January until the end of June, 440 events were registered, the second highest figure for this period since 2000, and overall losses of US $70B were recorded, notes the reinsurer. This figure already exceeds the total for 2009 as a whole and is well above the first-half average for the past ten years. Insured losses were US $22B, more than double the first-half average since 2000 and even higher than the figure for 2008, when the previous record for first-half losses was set.
“Following a relatively benign 2009, the first six months of this year were marked by three natural catastrophes ranked as great,” notes Prof. Peter Höppe, head of Munich Re’s Geo Risks Research. “Great” is the term used by Munich Re to describe events entailing billions in losses or several thousand fatalities.
The Haiti and Chile earthquakes in particular rank among the most devastating events ever recorded, based on a number of parameters. The January 12 earthquake in Haiti took the lives of approximately 223,000, one of the highest death tolls on record; further, 1.2 million were left homeless. The epicenter of the main quake, of magnitude 7, which lasted barely a minute, lay some 15 miles southwest of the capital, Port-au-Prince. Overall losses were huge relative to the country’s economic strength but insured losses (US $150M) were minimal due to low insurance penetration.
The situation following the earthquake in Chile on February 27 was a quite different. The magnitude 8.8quake, with its epicenter around 60 miles northeast of the city of Concepción, was the fifth largest ever measured. Although it released 500 times the energy of the Haiti earthquake, the death toll (521) was much lower.
“That shows how important and effective it is to offer people as much as protection as possible using modern, earthquake-resistant construction standards,” notes Höppe.
However, it was the second most expensive earthquake on record, with insured losses of some US $8B due to high insurance penetration levels in Chile’s commercial and industrial sectors. Overall losses amounted to US $30B. The third great natural catastrophe of the first six months of the year was the earthquake that struck China in April, claiming 2,700 lives.
Besides 55 geophysical events (including the eruption of the volcano Eyjafjallajökull on Iceland in March, which led to tens of thousands of flight cancellations), 385 weather-related natural catastrophes also caused significant losses. The costliest single event was Winter Storm Xynthia, which hit the Canary Islands and then swept across the Iberian Peninsula, France and parts of central Europe on February 26-28. Winds of nearly 240 km/h were recorded over the Pyrenees. Overall losses amounted to US $4.5B and insured losses to US $3.4B.
Other notable weather-related catastrophes during the first six months of 2010 were floods and landslides following torrential rainfall in Madeira in February, violent storms that produced heavy flooding in several U.S. states in the first half of May, severe floods in central Europe in June and widespread flooding in China, which is still ongoing. Global warming is expected to increase the number of weather events of this type.
